When contemplating and analyzing the possible registration of a notarial bond over a Permission to Occupy it is of vital importance to determine what may be registered under a notarial deed and what may not be registered.
Section 102 of the Deeds Registries Act, 47 of 1937 ("the Act") is clear in this regard. "Notarial bond means a bond attested by a Notary Public hypothecating movable property generally or specially."
To emphasize this point even more, Section 53(1) of the Act forbids a registrar of deeds from registering a mortgage bond, which purports to bind immovable property.
This begs the question whether a Permission to Occupy is regarded as movable or immovable property?
The definition of immovable property in the Act does not clarify the matter, as it is silent with regard to Permissions to Occupy.
The regulations under the Black Administration Act, 38 of 1927 which defines a Permission to Occupy as "permission in writing granted or deemed to have been granted in the prescribed form to any person to occupy a specified area of trust land for a specific purpose" also does not shed any further light on the matter.
Attention is also drawn to the Upgrading of Land Tenure Rights Act, 112 of 1991, which describes the holder of the "PTO" as a "putative holder". A "putative holder" in the definitions of this act means that the person occupies an erf as if he or she is the holder of the land tenure right in respect of that erf, but who is not formally recorded in the register of land rights as the holder of the right in question.
This means that a permission to occupy was regarded as a land tenure right. This statement can be confirmed by the definition of Land Tenure Right set out under the definitions of the Upgrading of Land Tenure Rights Act. The definition reads as follows "land tenure right" means any leasehold, deed of grant, quitrent or any other right to the occupation of land created by or under any law and, in relation to tribal land, includes such land under the indigenous law or customs of the tribe in question.
The test to establish if this is feasible is as follows: If a notarial bond is registered over a permission to occupy and such permission to occupy is upgraded to freehold in terms of the Upgrading of Land Tenure Rights Act, Act 112 of 1991, what security will be there for the bondholder of the notarial bond?
It is therefore submitted that a notarial bond cannot be registered where the security there under is that of a Permission to Occupy. The reason being that a Permission to Occupy is regarded as immovable property in terms of section 53(1) of the Deeds Registries Act, 47 of 1937, the Registrar is prohibited from registering a notarial bond, which purports to bind immovable property.
Readers' comments in this regard are sought - Editor of SA Deeds Journal
Republished with permission from the SA Deeds Journal